Raising the bar on sales performance

Sales has often been a no-go area for HR; sales directors typically recruit ‘knowns and clones’ and are often architects of their own recruitment, performance assessment and commission schemes. However, Mercer Human Resource Consulting is seeing greater involvement by HR in both capability assessment and reward management.

It is important to get this right, otherwise HR ends up dealing with the mistakes of mismanagement, where there is little performance or appraisal data, inconsistent assessment and evaluation and a lack of management audit trails – leading to grievance and, potentially, litigation.

Why does the bar need raising?

Sales forces tend to expand during growth times and sales people are usually more mobile during this phase; as a result, selection tends to be less rigorous, to put it mildly. Turnover also rises so the pressure to retain existing staff often leads to promotions based on need rather than role accountability.

As markets harden, the realities of these decisions come to the fore; targets get missed and underperformance reveals itself, as securing orders in an increasingly competitive environment exposes the true sales force skill and capability.

The second trait is that, in the economic cycle, sometimes the market and customer needs change significantly. A good example is the telecoms industry, where four years ago, the focus was on maximising market share. Now, the strategy is one of customer segmentation to identify and retain high value customers and to persuade both consumers and businesses to use more data services. For sales teams, this fast moving environment has meant a need to switch from selling telephony and connections to greater awareness of customer needs and solution selling, especially in the corporate market where the buyer is now the chief technology officer, not the telephone facility manager. Not only has the skillset changed, but the sale itself has moved from one of order-taking to relationship and key account management.

Time to undertake a capability audit

The implications are two-fold. One, it is likely that at least a third to a half of your sales team are unlikely to make the grade. And second, for a fair process of assessment and selection, you will need to ensure absolute clarity around the new role accountabilities, the new skill and competency expectations, plus a robust assessment process (we would recommend a centre that ensures each new competency is tested at least three times to ensure validity).

Sales leadership is also in spotlight

This process is likely to highlight weaknesses in your current sales leadership. Target setting, assessment and evaluation of performance will need an overhaul, particularly if new competencies have been introduced.

Recognition and reward will be misaligned

Often in these circumstances, the current sales reward programme and commission scheme will need re-calibrating. The incentive arrangements of the past are unlikely to be suitable to meet the new market realities and change in emphasis on account development.

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